Sports Direct shareholders have voted against the reappointment of chairman Keith Hellawell to the board at a fiery AGM.
At the lively meeting, 53% of independent investors rejected Hellawell’s appointment to the board.
But the chairman’s position was maintained after founder Mike Ashley – who owns 55% of the business – backed Hellawell to remain in his post.
Hellawell had offered his resignation at the weekend after the retailer came under fire over working practices in its Shirebrook warehouse and use of zero-hour contracts.
Sports Direct said this morning that it had asked Hellawell to stay on “in order to assist with making further improvements” at the business.
Following the vote, Hellawell denied that his position had become untenable and insisted: “I am going to prove that I am competent.”
In the build up to today’s crunch meeting, investors had been urged to vote against the re-election of executive deputy chairman Ashley and Hellawell to the under-fire retailer’s board after both were hauled before MPs as part of an inquiry into working practices.
The Business, Innovation and Skills Committee launched a probe into the business over working practices at its Shirebrook warehouse and its use of zero-hour contracts for retail staff.
Pension and Investment Research Consultants (Pirc) advised shareholders to vote against Ashley because of concerns about his influence on the board.
The group cited the judgement of MPs that Ashley should be accountable for working practices at Sports Direct, which have been heavily scrutinised.
Pirc has also advised shareholders to vote against the re-election of Hellawell, who the group claimed had not shown leadership.
But at today’s meeting, 92.6% of shareholders voted in favour of Ashley’s re-election.
When Ashley’s votes were taken into account, Hellawell’s position was safeguarded with 81% of votes approving his re-election.
‘It’s all your fault we’re in this mess’
The AGM proved a lively affair as Ashley clashed with the Unite union, telling them: “It’s your fault we’re in this mess.”
But Standard Life Investment head of stewardship and ESG investment, Euan Stirling, said Ashley should take responsibility and lead structural change within the business.
Stirling told the AGM: “We believe that a full and independent review of governance at the company is required, along with a commitment to publish and act on the review’s conclusions and recommendations in the next 12 months.”
Following a report by law firm RPC into working practices at the business, Sports Direct has pledged to axe zero-hour contracts for workers who would prefer to move to 12 hour deals, scrap the controversial ’six strikes and you are out’ rule at its warehouse and invest in a welfare budget, appointing nurses and welfare officers for staff.
Sports Direct shares rallied yesterday on the news, but ahead of today’s meeting, the retailer warned on profits for its current financial year, forecasting that EBITDA would come in at around £300m – a fall from £381m last year – sparking a 9% slump in its share price.